Risk Management Practices And Financial Performance Of Commercial Banks In Kenya
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Date
2024-12
Journal Title
Journal ISSN
Volume Title
Publisher
International Journal of Scientific and Research Publications
Abstract
In the contemporary world risk management and financial performance in financial institutions especially commercial banks has gained momentum. Using KCB, this study investigated the effects of risk management techniques on the financial performance of commercial banks. The study was informed by network theory, expectation theory, and enterprise risk management theory. The study employed descriptive research design. The study's population consisted of 460 management personnel from KCB Headquarters and its Nairobi County branches. The target group consisted of 46 middle and upper-level managers from KCB in Nairobi County. Since the study's target population was so small, a census technique was employed. The study employed a semi-structured questionnaire to collect data. The data collection tool's validity and reliability were assessed. Both descriptive and inferential statistics were computed using SPSS Version 27.0. The moral implications were considered. The results showed a strong positive relationship between organizational effectiveness and risk transfer. Furthermore, it was shown that risk avoidance contributed very little to the success of the company. Nevertheless, it was found that risk control had very little negative effect on the functioning of the company. Furthermore, it was discovered that risk retention considerably increased organizational performance. Lastly, government regulations had no impact because the association between the predictors and response variable remained same. The report recommended that KCB should put in place robust risk transfer and retention policies in order to enhance organizational financial performance. In order to safeguard banks from risks related to the banking sector, the report also recommended that the Central Bank of Kenya offer policy interventions in the form of strategic risk management technique.
Description
Journal Article
Keywords
Risk Transfer, Risk Prevention, Risk Control, Risk Retention, Government intervention, Financial Performance
Citation
Kithandi, C. K. & Kithandi, D. K. (2024). Risk Management Practices And Financial Performance Of Commercial Banks In Kenya. International Journal of Scientific and Research Publications